Correlation Between Citigroup and Roo Hsing
Can any of the company-specific risk be diversified away by investing in both Citigroup and Roo Hsing at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Citigroup and Roo Hsing into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Roo Hsing Co, you can compare the effects of market volatilities on Citigroup and Roo Hsing and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Citigroup with a short position of Roo Hsing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Roo Hsing.
Diversification Opportunities for Citigroup and Roo Hsing
Very weak diversification
The 3 months correlation between Citigroup and Roo is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Roo Hsing Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Roo Hsing and Citigroup is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Citigroup are associated (or correlated) with Roo Hsing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Roo Hsing has no effect on the direction of Citigroup i.e., Citigroup and Roo Hsing go up and down completely randomly.
Pair Corralation between Citigroup and Roo Hsing
Taking into account the 90-day investment horizon Citigroup is expected to under-perform the Roo Hsing. But the stock apears to be less risky and, when comparing its historical volatility, Citigroup is 1.49 times less risky than Roo Hsing. The stock trades about 0.0 of its potential returns per unit of risk. The Roo Hsing Co is currently generating about 0.47 of returns per unit of risk over similar time horizon. If you would invest 314.00 in Roo Hsing Co on November 29, 2024 and sell it today you would earn a total of 70.00 from holding Roo Hsing Co or generate 22.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 85.71% |
| Values | Daily Returns |
Citigroup vs. Roo Hsing Co
Performance |
| Timeline |
| Citigroup |
| Roo Hsing |
Citigroup and Roo Hsing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Roo Hsing
The main advantage of trading using opposite Citigroup and Roo Hsing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Roo Hsing can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Roo Hsing will offset losses from the drop in Roo Hsing's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Roo Hsing vs. Chi Hua Fitness | Roo Hsing vs. SS Healthcare Holding | Roo Hsing vs. Rexon Industrial Corp | Roo Hsing vs. Tsang Yow Industrial |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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